EFTA01084694.pdf

DAVID J. MITCHELL RE: ADFIN SOLUTIONS INC. February 16, 2016 Dear Partner, On Friday, the Board of Adfin voted to accept an offer from its largest shareholder, Cantor Venture, to fund $1,750,000. Alongside its founder, Jonathan Leitersdorf, Cantor has been funding the Company for the past two years on a bridge loan basis (Exhibit A). The end result is the shares that you purchased a number of years ago will be diluted. In a separate email, I will forward to you the details of the transaction. I have decided to allocate all of my shares into a vehicle structured to make up some of the dilution. Once I make the transfer, I will forward the details of this entity. The basic premise is that I will allocate the shares or economic interests among the four investors that I introduced to Adfin. The allocation will be based on the actual dollars you invested as percentage of the total dollars my group invested in Adfin (please see the following page). Personally, I feel very badly that this happened as I introduced you to this investment to co-invest alongside me. I truly thought this would produce a successful return for both of us. I would like to note that I received no benefit from the Company for asking you to invest. I did receive shares for my board participation, which I am also contributing to this vehicle. The irony is the Company is doing quite well and for the first time is achieving meaningful milestones (Exhibit B + Company Overview). My sincere hope is that the Company continues to be on the track and one day the investment that you made to receive the gain that you deserve for the risk. I hope the shares I have allocated to this effort helps to get you much quicker. I will continue to help the Company in anyway possible as I believe in the business and the outstanding team. I deeply appreciative of your friendship, and if you have any questions, please do not hesitate to contact me. David J. Mitchell 801 Madison Avenue, New York, NY 10065 (0) EFTA01084694  Percentage Percentage Post Deal o1MPref Shares 3,289,603 If Rights Fully NNW Pref Shares Pre-Deal Without Rights Subsai bed ProRata % Pro Rata al DIM Shares Adding WM Shares Glocer 228,571 1.10% 0.B% o.n% 7.06% 232,192 090,763 Oliver 114285 0.55% 0.12% 0.11% 3.53% 116,0% 230,381 ST 2.781.197 8.8E4 2.81% 2.60% 85.88% 2,83,260 5,406,457 Richard 114285 0.64% 0.12% 0.11% 3.53% 116,0% 230,381 11.11% 3.27% 3.03 100.0% 3,289,643 6,527,%1 New Total New % Name Pref Shares Pre-Deal without WM Shares Add DJ M shares With WM Shares With DIM Shares Glocer 228,571 1.10% 0.23% 232,192 460,763 0.46% Oliver 114,285 055% 0.12% 116,096 230,381 0.23% ST 2,781,197 . 8.82% 2.81% 2,825,260 5,606,457 5.65% Richard 114,285 0.64% 0.12% 116,096 230,381 0.23% 11.11% 3.27% 3,289,643 6,527,981 6.58% 801 Madison Avenue. New York. NY 10065 (o) I EFTA01084695  EXHIBIT A • Cantor and Julserra (Leitersdorf affiliate) will lead the round with a $1.75M investment of new cash at first closing ASAP • Conversion of approximately $7.3M in outstanding debt from Cantor, Julserra, David Mitchell and Southern Trust • Following the initial closing, the Company will offer, for 30 days, an additional $1M to the existing Series A investors (besides Julserra and Cantor) and accredited common stockholders • If such investors do not purchase the full $1M, the Company may sell the remainder to new investors on the same terms for a period of 5 months • All previously issued warrants will be terminated and the Series A will waive their rights to any anti-dilution adjustment [the $0.13 per share purchase price bakes in these presumptions to keep the cap numbers as simple as possible] • $0.13 per share, implying a post-money valuation of $12.8M when factoring in the option pool increase, but assuming the $1M rights offering amount remains unsold • 8% cumulative dividends senior to the Series A & Common • 1X liquidation preference senior to the Series A & Common • Board increased to 7 directors. All chosen by Cantor, but each 10% or greater stockholder will have the right to appoint 1 director — for now only Julserra and the Board must include the CEO. Gil Mandelzis will resign from the Board. The other 4 directors will stay and Howard Lutnick, Jed Kleckner and Henrique de Castro will join the Board. • Cantor will effectively control decision-making power at the Board and stockholder level subject to very limited minority rights protection set out in a new Shareholders Agreement and to fiduciary duties under Delaware law. • AdFin will be majority owned by Cantor 801 Madison Avenue, New York, NY 10065 (0) I EFTA01084696  EXHIBIT B 1) Programmatic Study with the ANA, ACA and Ebiquity • Signed - 20+ top brands signed to participate. Data is either beginning to flow or we are working through the process/remaining roadblocks - Clorox, Luxottica, Wendy's, Nissan, Infiniti, GMC, Chevrolet, Cadillac, Buick, Honda, Acura, Kia, Bank of America, Enterprise Rental Cars, Alamo Rental Cars, National Rental Cars, Expedia, Travelocity, Trivago, Hotels.com, Bank of America, Walmart (CA), Shoppers Drug Mart (CA), Atlantic Lottery (CA), Amsterdam Brewery (CA) • Signed, But Paused due to internal issues - Walmart, JCP, Hyundai • In Final Discussion - Pizza Hut, Disney, TD Bank (Canada) • All of this has taken tremendous effort and persistence, but we are finally in a position to conduct the Study • The updated timing for completion of the US Study is now mid-to-late Q2 timing, with the Canadian Study following behind by 1-2 months. 2) Beta / Trial efforts with Agencies/Trading desks • Signed - Huddles Masses, Good Apple, Horizon Media (HX) • In Discussion - Accuen, Assembly, Publicis 4 Partnerships - ongoing R&D and partnership discussions • Nielsen - who reiterated their support for what we are doing and agreed to explore joint R&D together in 2016 • Accuen (part of Omnicom) - the third largest trading desk has asked to review our demo and explore partnership possibilities around an "Audit" offering via AD/FIN • Publicis - have held several senior level meetings where there is interest in working together in 2016+ • AOL - recent discussions with internal teams interested in our platform 801 Madison Avenue, New York, NY 10065 (a) I (f) EFTA01084697  • Others include Turn, Amnet, White Ops, Ad Yapper 5) PR & Press - the AD/FIN focus around pricing transparency and accountability remains a big topic in 2016 • On 2/12, our Op-Ed "Programmatic Media Is Missing Something Big" was published in MediaPost http://bit.ly/1QcpN4W • On 1/29, our Webinar "Seeing Through the Programmatic Financial Fog" via the ANA had 114 people attend (all potential future customers) • Over the past 2 weeks, there have been numerous articles on the battle of media transparency, all creating more interest in AD/FIN http://adage.com/article/agency-news/ana-4a-s-feud-heats-ana- issues-investigation-hotline/302424/ http://adage.com/article/print-edition/ana-4a-s-fracas-shows-client- agency-bond-inoperable/302541/ 5) Team/Resources • To get all of this done in this timeframe, there is a lot to do, primarily getting AD/FIN integrated with 10+ DSPs as soon as possible, and beginning to analyze data we are receiving • We currently have 9 F/T employees (7 Tech/Ops, 2 Biz) and 5 P/T (3 Biz, 2 Tech/Ops) • We are actively recruiting for 4 critical hires - Product, Dev Ops, Business Intelligence, QA, plus 1 Backfill for a departing engineer. 801 Madison Avenue, New York, NY 10065 (a) I (0 EFTA01084698  ADifIN Powering Independent Programmatic Media Visibility I Transparency I Intelligence INVESTOR OVERVIEW FEB 2016 EFTA01084699  AD/FIN In Summary AD/FIN sits at the intersection of AD-tech • FIN-tech The industry's only H provider of programmatic media intelligence & accountability Proprietary technology processes log-level transaction data at scale from any market DSP/SSP Campaign intelligence Market-level intelligence Te-facto' standard for benchmarks and price discovery Enabling Index-Linked offerings, Proprietary Research, and new ways to Trade/Hedge/Transact media Business model based on volume usage (CPM), SaaS (monthly), and index-linked fees Target users across AD FIN markets: Advertisers: Agencies/Consultants: Financial: • CMOs /CFOs • Media Buyers/Planners • Buy/Sell Side Analysts • Procurement • Analytics/Research • Hedge Funds • Internal Desks • Trading Desks (ATDs) • Consultants Now is the time, while marketers are demanding transparency and shifting billions to this market 2 oAD/FIN Confidential. All Rights Reserved EFTA01084700 WHY AD/FIN AD/FIN EFTA01084701  Programmatic Media is Our New Reality $20B Over S20B Will Be Spent Programmatically Billie US 1 Growing FAST! Brings great promise. efficiency, targetability, scalability, ROI 100X 100X Volume of NASDAQ...More Complex Than Wall Street Brings new, complex, tech-enabled supply chain Gartner 4 ©AD/FIN Confidential. All Rights Reserved 'Source &tinkerer. MA Goagle. MagnaGlobal AD/FIN EFTA01084702  BUT...Growing Integrity Problem <40% <400 Of Every S1 Spent Programmatically Buys Media . Most transactions are virtually blind to the buyer and seller Financial `fog' is costing advertisers $$$ potentially skewing key metrics <50% <5O% Of Programmatic Ads Served Are Ever Seen . Advertisers need to take control and demand accountability and Go, sle visibility ©AD/FIN Confidential. All Rights Reserved 5 'Source: ellatketer, WFA. Goode, MagnaGlobal AD/fIN EFTA01084703  Advertisers Are In The Dark Over 80% of advertisers know they need better tools and information around the economics of programmatic media • Q: The economics and flow of dollars to execute programmatic media buys are sufficiently clear to me and my team... 40/0 14% Yes — we have all the information we need _ No — it remains a 'black box'; We need better information & tools Unsure/No Opinion Source: Online poll of 100+ ANA members oAD/FIN Confidential. All Rights Reserved 6 EFTA01084704 We Power Programmatic Intelligence & Transparency Founded on the belief that markets thrive with greater access to unbiased information AD/FIN brings independent data access & intelligence to programmatic media allowing buyers, agents and sellers to transact with greater confidence, accountability and transparency ©AD/FIN Confidential. All Rights Reserved EFTA01084705  Led By Experts ANDREW ALTERSOHN MILOSZ TANSKI CHIEF IXECUTIVE OFFICER CHIEF TECHNOLOGY OFFICER • 25• year veteran ei digital media and • 9• years' experience in digital tech. with marketing emphasis on large scale distributed • Previously served as the President of systemS Haves Media, North America • Previously worked at Apple. Admeld and • Held leadership roles at interactive pioneer Barracuda Networks agencies including dotas Publics modem • arclutected Admeld. one of firm PCB and Navy Interactive exchanges (purchased by Google) • Began his career at mercer management • Leader at Apo* on the (Cloud project Consulting • Holds a 8 S. In Computer Science from • Holds an MBA from the University of Oakland University Michigan and BS in Economics from • Dreamt about Market Index since building Marton School. University of Admeld Pennsylvania • Served as an advisor/consultant to Smanling, PricingEngine.com 8 ©AdFin. Confidential. All Rights Reserved AD/fIN EFTA01084706  Backed By Leaders AD/FIN is backed by Cantor Fitzgerald, one of the world's leading financial services firms, and prominent angel investors TOM GLOCER JONATHAN LEITERSOOF CHAIRMAS ANC CEC FORMER CEO FOUNDER CANTOR FITZGERALD THOMSON REUTERS JULSERRA CAPITAL IAD DAVID MITCHELL GIL MANDELZIS PRESIDENT EXECUTIVE CHRRMANI MITCHELL HOLDINGS LW TRAIANA. INC 9 oAdFin. Confidential. All Rights Reserved AD/FIN EFTA01084707 HOW AD/FIN AD/fIN EFTA01084708  Big Data In, Intelligence Out AD/FIN is the only independent entity that can ingest, normalize and process the scale and complexity programmatic transactions: trade logs, ad server, and associated meta data INGEST &AGGREGATE NURP mi EIEpRouss QUERY & OUTPUT Transaction Log Files Meta-Data Ad Server Data SECURITY LAYER AD/FIN Intelligence Platform AD/F1N Firewall / Private Network Secure Databases Data Compression Log API Secure Data Files Connection Normalization Secured Customer Data -1 O oi User Authentication Continuous Data Intake ,/"? Secured Storage Market -4.- Separate Secured Custom Indices Data Anonymization' 411/ Databases •011 -4 • Billions of log files to ingest •daily Market & Custom Indices • Trillions of data points to store•••in perpetuity CAMPAIGN:CENTRAL. • Petabyte calculations•••in 'real-time' 11 ©AD/FIN Confidential. All Rights Reserved AD/FIN EFTA01084709  AD/FIN Tools & Services BSA Start with AD:BOX and Leverage Intelligence Tools As Needed TM CAMPAIGN:CENTRAL' ts; CAMPAIGN:WATCH Plan, Bidand Transact Smarter -e.g....#.' rh Know Where Each S Goes el•••• birVININDE INTELLIGENCE & FORECASTING FEE & PRICE TRANSPARENCY Enterprise•wide intelligence across all DSPs, SSPs, Channels and Campaignlevel analysis, scoring and benchmarking to better manage partners to drive smarter decision making fees, costs, and partners AD:BOX' oz.- 4; Dropbox Never Lose YourBidBata DATA INTEGRITY & LOSS PREVENTION Normalized, secure bid data storage • across DSPs/SSPs - for efficient planning, forecasting, and trend analyses 12 eAcIFin. Confidential. All Rights Reserved AD/fIN EFTA01084710  Multi-Phase Roadmap Pricing and intelligence support for next DERIVATIVES & RISK PRICING A S&P DOWJONES generation media buying, hedging and INDICES risk mitigation INDEX-LINKED OFFERINGS Bespoke data analysis and market trend reports RESEARCH / CUSTOM ANALYSES Market•wide benchmarks, Indices and analysis MARKET:TRACK teZiIIow .1 . Enterprise wide programmatic CAMPAIGN:CENTRALTM 'mint intelligence & benchmarks Per campaign programmatic CAMPAIGN:WATCHTM VEHICIA HISTORY MONTS scorecard & benchmarks Long term, secure bid data storage for AD:BOXIm ;.1 .` Dropbox planning, forecasting, negotiations AD/FIN TECH & DATA PLATFORM 13 eAdfin. Confidential. All Rights Reserved AD/fIN EFTA01084711  Partnering to Analyze The Current State Working with 20 Major Brands To Launch Industry-First Programmatic Research APRIL 23. 2015 AD/fIN ebiquity EBIQUITY AND AD/FIN PARTNER TO BRING FINANCIAL TRANSPARENCY TOPROGRAMMATIC ANFRTISINO ac Joint Industry Study Will Follow the Dollars and Uncover Market Benchmarks Ptik Lead the Mete, Communt y Aa Create a data-driven fact base around the economics of programmatic media trading driving greater knowledge into the industry • Flow of dollars from advertisers to exchange • Actual CPM/CPC/CPX, and spread by channel, category, day-part, geo, etc. • Working to non-working ratios, ranges and baselines • Other insights and analyses as data becomes available PARTICIPATION: Up to 20 major advertisers in the US and Canada SCOPE: Up to 90 days of trades; plus potential to go back up to 90 days TIMING: Targeting Q1'16 for data ingestion; 02'16 for study deliverables 14 oAD/FIN Confidential. All Rights Reserved AD/FIN EFTA01084712  Campaign-Level Spend Analysis Total Budget $18.000.1 Estimated Spend to Date (61891 $11,500°' ■ Working Media / Inventory $6,44010 58% ■ Execution $4,713.0 41' ■ %Pi% / Storting Como( Si 38 ■ Tracing Desk lAcklann Tett $675 00 • • $4, 2%•4 172S.00 Manage, OSP DSO SOCMC IS 710000 7% PlarivisiDSP I.GM $35000 3% SO-Sent* OSP DAA 7275.00 2% • ■ Tootling Data in S335S0 IN Sara / Sere' COD Might. Prob04%. In% 1175.00' DOMONIUSI Oath P•opi• Sivorp SHOW 5% TI-ComPPW. sti.7•• 407% I anCn - CO00,11 USA Gsrpn7 Avprope q°% Seder Avenge .35%_ 441% ...wry AYH'S* e.0% All Data is Illustrative 15 (Main. Confidential. All Rights Reserved EFTA01084713  Campaign-Level Spend Trail Budget Trail .9 A Advertiser Trading Desk UllistOwn Cdf. Elec.. Fee'. ExchttnporSISS Publisher • • 10096 V?G 996 696 10461 6696 $539 All-In $4.75 $3.82 $3.66 $3.32 1 $3.02 Working $2.48 All Data is Illustrative 16 ©AdFin.Confidential. All Rights Reserved EFTA01084714  Supply & Partner Intelligence Hi! AdFin Display Mobile < Waited Oa t 2014 > $2.11 $3.16 an. AdX 1 . 5 NA 5231 Illinweilvr. PS Mica - 1311=i iviaSsnetCaMpens• PskMohr Sr. Supply 80.000. Ad Csiojortbe • AppNexus semi AdX Rubicon Pulsepoint Snubs $2.63 $2.87 $1.49 $2.24 OpenX Centro -4 Pubmatic $2.50 $1.38 Rubicon $2.07 All Data is Illustrative $1.67 Casale $2.27 SI 72 a ' . 77 17 cAdfin. Confidential. All Rights Reserved EFTA01084715  Historical & Forecasting Intelligence TOW Sadie Peke Spouvo Oa, C1R • See publisher clearing prices and assess volume and price correlations On COM Con Moo &deo POP Spmd OsypartIng CPII P.COco:c I IS CO ............................... " With Predicti )n Modeling, w" execute bid decisions with VAX 5000 informed price forecasts Mere CO • All Data is Illustrative 18 ©AD/fIN Confidential. All Rights Reserved EFTA01084716  Coming Soon: DSP/SSP Optimal Purchase Paths µdaCcsl RedaMath Atha Aksu 140M SSPkelps k4tdeCat $73.6K $23(K $23.5K SI2CK $931( MX $4.9K SAO $726 56.63 °Fed 54,8K OUR $193 11.75 Righthkedia $4.7K MN, imemi Rubicon 14.5K Index Exchange $4.3K WS I Coop A6Sense 142K Thant Nadal 142K BIriOR 14.1K Meta Nettwrk $4.0K 10 SRO, 131K $6.61 11415 11 hi media $3.7K 12 lkadeDoubler 13.7K 13 WebPerbmunce 13.4K I 510.75 19 cAD/fIN Confidential. All Rights Reserved All Data is Illustrative EFTA01084717  Coming Soon: Bid Informed Fraud/Viewability Heat Map Trends Price Spread LiSt CPM Compare: None Audience 59 00 Male 28 Or Viewable W Non-Fraudulent TapAd Medf Double Click Bid... $2.59 ▪ Non-Viewable 2.50 $2.64 (!), sV," •.• 51 Fraud NOOPOP $1.31 Din RIPOPPOIMP 3247 $1A$ • in, O 54.67 7n. 1342 $114 videolouv $6.93 AppNexus $3.19 iewable Non-viewable (P) ff.A 413,E St 6.2 $5.13 $2.56 AdX Rubicon Pulsepoint Neap Fraud $3.51 $2.87 $1.49 $2.24 $1.29 OLO.: (.1!) OpenX Pubmatic $2.50 1.38=r $1.67 $2.27 $2.07 81.72 20 cAllifIN Confidential. All Rights Reserved All Data is Illustrative EFTA01084718  Financial Summary Pre-revenue Invested to date = $10M In-process • Debt to Equity Conversion (Feb 2016) Inside Round (Feb 2016)_ $2.0M Targeting B-Round Raise (2016) = $8M-$10.0M Preliminary Business model includes volume (CPM), SaaS, and index-linked fees Project $15-20M in annual profits by 2020 and growing•••plus additional upside from pricing/structuring new Index-Linked Offerings EFTA01084719 ANI AD/fIN EFTA01084720